Safra acquires remaining $7.4M stake in Lenox Hill retail from Ashkenazy, Wharton Properties

UPDATED, 10 a.m., October 27, 2024: JSRE Acquisitions through the entity 21 East 62nd JSRE Member LLC bought out partners Ashkenazy Acquisition, 101 Holdings, and Wharton Properties through the entity 2013 Iconic Trust LLC (and others) in a deal valued at $7.4 million, for about half of the economic interest in the seven-unit residential walkup building (C7) with retail at 21 East 62nd Street in Lenox Hill, Manhattan. JSRE is affiliated with the lender, Banque J. Safra Sarasin, which provided a loan with an original principal of $11.2 million in 2013. This was an entity level transaction, not a deed transfer. JSRE Acquisitions already owned the remaining approximately 50 percent stake of the building.
Ashkenazy Acquisition lost the adjacent retail building at 690 Madison Avenue to note holder SL Green Realty, in 2021.
The deal closed on October 10, 2024 and was recorded on October 23, 2024. The property has 5,800 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is approximately $2,546.
The seller bought the property on July 26, 2013, for $14 million. The signatory for Ashkenazy Acquisition, 101 Holdings, and Wharton Properties was Ben Ashkenazy, Michael Ashkenazy, and Jeff Sutton. The signatory for JSRE Acquisitions was Carlos Bertaco and Gina Sutt Malul. The partners bought the building in July 2013 for $14 million and they borrowed $11.2 million from Banque J. Safra Sarasin which is affiliated with JSRE Acquisitions through the J. Safra Group. Carlos Bertaco and Gina Sutt Malul are affiliated with both Safra National Bank and JSRE.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer JSRE Acquisitions had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Ashkenazy Acquisition purchased one property in one transaction for a total of $20.3 million and sold or turned over six properties in four transactions for a total of $282.3 million over the same time period. The former owners according to the Department of Housing Preservation and Development includes Donny Furer, head officer and Victor Polanco, officer. The business entity is 21 East 62nd Street Llc.

The property

The residential walkup building with 7 residential units in Lenox Hill has 5,800 square feet of built space and 12,269 square feet of additional air rights for a total buildable of 18,070 square feet according to a PincusCo analysis of city data. The parcel has frontage of 18 feet and is 100 feet deep with a total lot size of 1,807 square feet. The zoning is C5-1 which allows for up to 4 times floor area ratio (FAR) for commercial and up to 10 times FAR for residential with inclusionary housing. The property is in the Upper East Side Historic District. The city-designated market value for the property in 2022 is $7.8 million. The property has 9 rent regulated units according to city tax records from 2020.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has received $2,700 in OATH penalties in the last year.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The block

On this tax block, PincusCo has identified the owners of nine of the 22 commercial properties representing 197,576 square feet of the 425,089 square feet. The largest owner is Sl Green Realty, followed by Nabil Chartouni and then Buchbinder & Warren.
There are no active new building construction projects on this tax block.

The majority, or 34 percent of the 425,089 square feet of built space are hotel buildings, with office buildings next occupying 28 percent of the space.

The seller

The PincusCo database currently indicates that Wharton Properties owned at least 87 commercial properties with 252 residential units in New York City with 3,376,939 square feet and a city-determined market value of $1.6 billion. (Market value is typically about 50% of actual value.) The portfolio has $263.8 million in debt, with top three lenders as Valley National Bank, Bank of China, and Provident Bank respectively. Within the portfolio, the bulk, or 67 percent of the 3,376,939 square feet of built space are office properties, with retail properties next occupying 19 percent of the space. The bulk, or 85 percent of the built space, is in Manhattan, with Brooklyn next at 11 percent of the space.
The PincusCo database currently indicates that Ashkenazy Acquisition owned at least 10 commercial properties in New York City with 1,010,541 square feet and a city-determined market value of $203.7 million. (Market value is typically about 50% of actual value.) The portfolio has $227.7 million in debt, with top three lenders as Bank Hapoalim, Mesa West Capital, and Benefit Street Partners respectively. Within the portfolio, the bulk, or 68 percent of the 1,010,541 square feet of built space are retail properties, with hotel properties next occupying 17 percent of the space. The bulk, or 55 percent of the built space, is in Queens, with Manhattan next at 30 percent of the space.

The buyer

The PincusCo database currently indicates that Jsre Acquisitions owned at least six commercial properties with 48 residential units in New York City with 73,341 square feet and a city-determined market value of $54 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 45 percent of the 73,341 square feet of built space are elevator properties, with walkup properties next occupying 26 percent of the space. They are all located in Manhattan.

Correction: A prior version of this post said the $7.4 million was for full control of the property, when in fact it was for only about 50% of the property. Safra already owned the remaining portion.

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